Vocabulary edit form 'Tags' is confusing

criticality: 
Moderate
Drupal7: 
Open
This happened to: 

User didn't know what the 'Tags' checkbox would do if unchecked.

When creating a vocabulary you're presented with a choice of 'Tags' as a checkbox. This controls both autocomplete and whether users can create new tags when posting content.

Implications: 

Taxonomy form handling needs a complete rewrite.

Solution: 
[#340652] (separates the widget and term creation). We should remove the checkboxes for "Tags" and "multiple select" and replace this with a radio for: Tags/autocomplete single select multiple select